Stock Market Development Under Globalization: Whither the Gains from Reforms?

38 Pages Posted: 20 Apr 2016

See all articles by Sergio L. Schmukler

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Juan Carlos Gozzi

Board of Governors of the Federal Reserve

Augusto de la Torre

Columbia University, School of International & Public Affairs (SIPA), Students

Date Written: April 1, 2007

Abstract

Over the past decades, many countries have implemented significant reforms to foster domestic capital market development. These reforms included stock market liberalization, privatization programs, and the establishment of regulatory and supervisory frameworks. Despite the intense reform efforts, the performance of capital markets in several countries has been disappointing. To study whether reforms have had the intended effects on capital markets, the authors analyze the impact of six capital market reforms on domestic stock market development and internationalization using event studies. They find that reforms tend to be followed by significant increases in domestic market capitalization, trading, and capital raising. Reforms are also followed by an increase in the share of activity in international equity markets, with potential negative spillover effects on domestic markets.

Keywords: Markets and Market Access, Economic Theory & Research, Access to Markets, Privatization, Corporate Law

Suggested Citation

Schmukler, Sergio and Gozzi, Juan Carlos and de la Torre, Augusto, Stock Market Development Under Globalization: Whither the Gains from Reforms? (April 1, 2007). World Bank Policy Research Working Paper No. 4184. Available at SSRN: https://ssrn.com/abstract=977599

Sergio Schmukler (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

Juan Carlos Gozzi

Board of Governors of the Federal Reserve ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

HOME PAGE: http://www.federalreserve.gov/econresdata/juan-carlos-gozzi.htm

Augusto De la Torre

Columbia University, School of International & Public Affairs (SIPA), Students ( email )

420 West 118th Street
New York, NY
United States

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